Earnings and economic news combined to lift the markets higher last week as the 3rd quarter earnings season began to ramp up. All five Major Markets climbed higher as the market experienced broad-based advances. The S&P 500 registered its third consecutive weekly gain as it traded within one point of its all-time high set back on July 26th.
This week will see over 850 companies report 3rd quarter earnings, of which 150 of those are in the S&P 500. Next week will then see the largest number of reports with over 1150 companies reporting.
In economic news, Existing Home Sales released on Tuesday missed expectations, falling 2.2% in September. Wednesday saw the release of the weekly Mortgage Applications and the monthly FHFA House price index. The mortgage composite index dropped 11.9% week over week, while the FHFA House Price Index managed to close higher, but below expectations. This news weighed on the sector, coming into Thursday’s monthly New Home Sales report. In further mixed news, New Homes sales came in slightly above expectations, however, August’s reading of 713,000 was revised downward to 706,000.
This economic news caused Real Estate to register the worst performance of the S&P 500 sectors. Meanwhile, Energy added over 4%, returning the segment back into positive territory for the year.
Finally, in Brexit news, Boris Johnson was forced to accept the EU’s offer for a January 31st, 2020 extension. This follows after the Commons voted to approve his deal, but not his timetable, last week.
https://www.bbc.com/news/uk-politics-50205603
EU Council President Donald Tusk characterized this as a “flextension”, meaning that the UK could leave the EU sooner, if a deal passed their parliament. Members of Parliament (MPs) have proposed an early general election in December with the hopes that yet another election would provide the voter support and members of parliament necessary to finally make Brexit a reality.
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